Can Bessent's Bond Buyback Work?

• The Treasury's buyback is viewed as a 'non-conventional tool' that may not prevent longer-dated yields from drifting higher.
• Concerns are raised about the size of 20 and 30-year bond auctions and a 'global issuance problem', specifically an 'elevated real 30-year problem'.
• Fundamental issues, including the Fed's unclear reaction function and hot economic data, are seen as the main drivers of yields, which the Treasury's buyback cannot fully address.

Analysts discuss the US Treasury's bond buyback announcement, expressing skepticism about its long-term effectiveness in controlling rising yields. They highlight underlying issues such as large auction sizes, global issuance problems, and the Federal Reserve's reaction function as primary drivers that will likely continue to push longer-dated yields higher.